Therefore, in determining the level of Microsoft’s market power, the relevant market is the licensing of all Intel-compatible PC operating systems world-wide.
Findings of fact, United States of America v Microsoft Corporation, Civil Action 98-1232 (Issued November 1999) (the document is available in Adobe PDF, WordPerfect 5.1 and HTML formats, but no Microsoft-proprietary ones)
Steve Ballmer
Life changed at Microsoft in 2000. On 13 January Steve Ballmer, who in June 1980 had become its 30th employee, was promoted from heading its sales and support operations to chief executive. Bill Gates was still the chairman and ‘chief software architect’, with oversight of how the company should build its tools and products. He would still be involved in key decisions. But Ballmer took over day-to-day responsibility for the company; he would have to embody the qualities that the company now stood for to governments and businesses and individuals.

…

The rest, around $3 billion, came from software and ‘services’ – such as the iTunes Music Store, the smallest but fastest growing, which had generated almost $1 billion on its own.
Zune
Billion-dollar digital businesses tend to attract Steve Ballmer’s attention – especially if Microsoft isn’t getting a thick slice of them. Inside Microsoft at the beginning of 2006, the rising tide of iPods, and more importantly the continuing failure of PlaysForSure and subscription services based around it to attract customers away from Apple’s little boxes, had people concerned. ‘There was this big debate about whether we should build [music features] into phones, or go full frontal into battle with the iPod’, recalls Pieter Knook, who was at Microsoft for nearly 20 years and ran the Windows Mobile team from 2001 until spring 2008. ‘Steve [Ballmer] and Robbie [Bach, head of the Entertainment and Devices division, which included the Xbox and Windows Mobile businesses] really favoured that.

It is a tablespoon of doubt.
3
Keeping Score
When physicians finally learned to doubt themselves, they turned to randomized controlled trials to scientifically test which treatments work. Bringing the rigor of measurement to forecasting might seem easiesr to do: collect forecasts, judge their accuracy, add the numbers. That’s it. In no time, we’ll know how good Tom Friedman really is.
But it’s not nearly so simple. Consider a forecast Steve Ballmer made in 2007, when he was CEO of Microsoft: “There’s no chance that the iPhone is going to get any significant market share. No chance.”
Ballmer’s forecast is infamous. Google “Ballmer” and “worst tech predictions”—or “Bing” it, as Ballmer would prefer—and you will see it enshrined in the forecasting hall of shame, along with such classics as the president of Digital Equipment Corporation declaring in 1977 that “there is no reason anyone would want a computer in their home.”

…

Note also that Ballmer didn’t say the iPhone would be a bust for Apple. Indeed, he said, “They may make a lot of money.” But still there is ambiguity: how much more than 2% or 3% of the global mobile phone market would the iPhone have to capture to be deemed “significant”? Ballmer didn’t say. And how much money was he talking about when he said Apple could earn “a lot of money”? Again, he didn’t say.
So how wrong was Steve Ballmer’s forecast? His tone was brash and dismissive. In the USA Today interview, he seems to scoff at Apple. But his words were more nuanced than his tone, and too ambiguous for us to declare with certainty that his forecast was wrong—much less so spectacularly wrong it belongs in the forecasting hall of shame.
It is far from unusual that a forecast that at first looks as clear as a freshly washed window proves too opaque to be conclusively judged right or wrong.

“Beep. You…have…no…new…messages,” the mechanical voice announced. It might as well have added the word “loser” at the end.
With the software industry doubling every year, and Microsoft fighting to capture market share in every major category, the stakes seemed high enough to justify self-sacrifice. The corporate culture reinforced this mania. It wasn’t until I finished a set of meetings with Steve Ballmer, Microsoft’s hard-charging, demanding, and voluble second-in-command, that I convinced myself that I had earned a break. Ballmer was in Sydney reviewing our work in Asia. When we finished his business-review meetings, a two-day-long event where Ballmer tended to shout and harangue, a colleague—Ben—suggested we unwind by going to a slide show about trekking in Nepal given by a local adventure travel company.

…

I was long overdue for a holiday. When the presenter mentioned that the Annapurna Circuit was a “classic trek that takes three weeks, covers two hundred miles, and gets you as far out in the Himalayas as you could imagine,” I mentally began booking the time off. Next stop, Nepal. Over a Mongolian hot-pot dinner with Ben, I joked that maybe if you went high enough into the Himalayas, you could not hear Steve Ballmer screaming at you.
BACK IN NEPAL, CROWING ROOSTERS WOKE ME JUST BEFORE SUNRISE. The Timex Ironman read six o’clock. I debated snoozing a bit longer before meeting with Pasupathi for tea. The Himalayan dawn was cold; the four-season North Face bag felt like a pizza oven. But excitement over finally being in Nepal won out. I put on a warm thermal layer before leaving the bag.
Fog blanketed the river valley.

…

.* The message this sent to employees was that if the company did well in the long term, they would also. But there were no guarantees, and only hard work and smart strategic thinking would increase the odds of this calculated risk paying off. Like much of history, it seems obvious in retrospect that this was a fantastic trade-off, but at the time none of us knew.
By 1999, those of us who had been at the company for a long time had done quite well. I give most of the credit to Bill and Steve Ballmer for their visionary leadership and their tenacious attention to detail. The two of them reminded me of a theory of Warren Buffett’s that I had read—whom you work for makes a big difference. Buffett recalled that a long time ago, baseball players like Babe Ruth and Lou Gehrig voted a full share of their World Series proceeds to their batboy.
“The key to life,” said Buffett, “is to figure out who to be the batboy for.”

Microsoft
In a May 2001 address at the Stern School of Business entitled “The Commercial Software Model,” Microsoft Senior Vice President Craig Mundie said that the Gnu Public License (GPL)—the license that governs the Linux kernel, among other projects—posed “a threat to the intellectual property of any organization making use of it.” A month later, in an interview with the Chicago Sun-Times, Microsoft CEO Steve Ballmer characterized Linux as a “cancer that attaches itself in an intellectual property sense to everything it touches.” Six years later, Ballmer and Microsoft were on the offensive, alleging in an interview with Fortune that the Linux kernel violates 42 Microsoft patents.
In 2009, Microsoft, calling it “the community’s preferred license,” released 20,000 lines of code under the GPL, intended for inclusion into the Linux kernel.

…

On the cloud, developers can employ Microsoft’s .NET stack or erstwhile competitors like Java, JavaScript, or PHP, and build software in the open source Eclipse development environment. And since 2008, Microsoft has been a sponsor of the Apache Software Foundation, an open source governance non-profit.
In other words, the once-dominant Microsoft is adjusting to the shifting landscape; one in which the developers, not the vendors, are in charge. Steve Ballmer, famous for jumping up and down on a stage screaming, “DEVELOPERS! DEVELOPERS! DEVELOPERS!” finally seems to be putting them front and center with the company’s strategy.
Netflix
In an interview with Fortune in 2007, Netflix CEO Reed Hastings summed up his company’s future simply, saying “We named the company Netflix for a reason; we didn’t name it DVDs-by-mail. The opportunity for Netflix online arrives when we can deliver content to the TV without any intermediary device.”

Windows CE smartphones were still a niche market, but if consumers took to the platform en masse as they did later with the iPhone, Google’s entire business could be in jeopardy.
This wasn’t an exaggeration. Back then, Microsoft and Google were in the midst of a nasty battle of their own for dominance in search, and for top dog in the tech world. After two decades of being the first-choice workplace of top engineering talent, Microsoft was now losing many of those battles to Google. Chairman Bill Gates and CEO Steve Ballmer had made it clear they took Google’s challenge personally. Gates seemed particularly affected by it. Once or twice he made fun of the way Page and his Google cofounder Sergey Brin dressed. He said their search engine’s popularity was “a fad.” Then, in the same breath, he would issue the ultimate compliment, saying that of all his competitors over the years, Google was the most like Microsoft.

…

Key features of the iPhone were far from perfected. Its memory and the virtual keyboard, already one of its most controversial features, still didn’t work right. Touching the letter e—the most frequently used letter in the alphabet—often caused other letters to pop up around the keyboard. Instead of appearing instantly after being “typed,” letters would emerge after annoying lags. Microsoft CEO Steve Ballmer had been among the many declaring the iPhone a failed product because it didn’t have a physical keyboard. Apple executives were worried too. They weren’t comfortable using the keyboard either. “Everyone was concerned about touching on something that doesn’t have any physical feedback,” one of the executives said. But Jobs was unyielding on the issue. “Steve’s rationale was just what he said onstage.

…

And, of course, BlackBerry was quite strong [with a lock on almost every corporation in the world].”
So, while Brin, Page, and Schmidt were pushing the Android team hard, they were also beefing up the Google iPhone team. Most notably, they put Vic Gundotra, a newly hired but well-known executive from Microsoft, in charge of running it. Gundotra, who was thirty-seven, had spent his entire career working for Bill Gates and Steve Ballmer, becoming their point person for the company’s relationship with all external Windows software developers—tens of thousands of geeks worldwide. Gundotra was well-known for his technical acumen, his near-Steve-Jobs-quality presentations, and his willingness to take risks and be controversial. Microsoft’s incredible growth and dominance during the 1990s was in no small part the result of his tireless evangelism, convincing legions of programmers worldwide to write software for Windows when few thought it would succeed.

They would have been even more perturbed to hear Eric Schmidt say that YouTube’s real challenge was to figure out how to sell advertising. “If that works,” he told me, “it will seem like the birth of the CBS network in 1927.”
Because YouTube was making no money, there was a fair amount of sneering from media executives. Like Napster, they said YouTube would be hobbled by copyright lawsuits and would be unable to monetize its enormous traffic. “Right now,” Microsoft CEO Steve Ballmer declared, “there’s no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that’s up there is owned by somebody else.” That “somebody else,” the broadcast and cable networks believed, was them. YouTube, they asserted, built its success on their backs; thirteen of the twenty most popular videos on the site, the Wall Street Journal reported in early 2007, were professionally made, not user generated.

…

Moore’s law was a statement saying, ‘We’re going to double the performance [of integrated circuits or computer chips] every eighteen months, and let’s get organized to do it.’ They spent billions of dollars doing that. If you didn’t have Moore’s law, you wouldn’t have that advancement. It’s actually causal in another way.” The management pressure to double performance helps assure it.
IN SPITE OF GOOGLE’S RAPID GROWTH, or because of it, by 2007 the company had become a target for lawsuits and sneers. Leading the chorus was Microsoft CEO Steve Ballmer. In 2007, he had labeled Google “a one-trick pony,” and had derided the company at nearly every public opportunity since, telling reporters, “they have one product that makes all their money, and it hasn’t changed in five years.... Search makes ninety-eight percent of all their money.” Irwin Gotlieb, who is not in Ballmer’s adversarial camp, nevertheless shared the view that Google’s attempt to broaden its reach had been a failure.

…

Google’s revenues had surged 42 percent compared to the first quarter of 2007; its profits had jumped 30 percent, and as Varian had suggested, its ad clicks had risen 20 percent. “Google Inc’s Go-Go Era Apparently Isn’t Over,” said a report in the Wall Street Journal. The Times headline was: “Google Defies the Economy and Reports a Profit Surge.” As the report showed, Google hogged three quarters of all U.S. search advertising dollars, compared to only 5 percent for Steve Ballmer’s Microsoft.
Yet Ballmer had a point. Google had not figured out how to make money on its surfeit of products. YouTube accounted for one of every three videos viewed online, three billion of the nine billion viewed in January 2008. The impact of this new medium would forever change the way politics are conducted. Seven of the sixteen candidates who ran for president in 2008 announced their candidacies on YouTube, and more people saw a taped version of the July 2007 Democratic presidential debate there than live on CNN.

pages: 504words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by
Fredrik Erixon,
Bjorn Weigel

Many in the tech analyst community would say it prevented Microsoft from quickly seizing most of the defining trends in the past decade of ICT growth.
Like many other firms, Microsoft had a clear (and, as it turned out, prescient) idea of how markets and products would evolve. In 2000, at the height of its antitrust problems in the United States, Microsoft explained what the future of computer software and hardware would look like. Steve Ballmer, the then newly minted heir to Bill Gates, described how Microsoft would create a “unified platform through which devices and services co-operate with each other.”7 Microsoft predicted the need for interconnected web services that could be used across platforms and shared between colleagues or family members. It understood what would come in location-aware devices, voice-control services, and photo sharing.

…

While other innovators deserted the operating system, Microsoft was too afraid of destroying the value of Windows by launching stand-alone products that worked in other ecosystems. It believed in a future based on a Windows-controlled ecosystem for all devices and services – one ring to rule them all.8
This philosophy helped shape a corporate culture that grew arrogant and missed many of the developments in the market. Steve Ballmer’s colorful speech just after the launch of the iPhone in 2007 is indicative of the culture that permeated Microsoft:
There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.9
Six years after Ballmer’s prediction, only 3 percent of new mobile phones used Microsoft’s operating system while Apple’s iOS had close to 50 percent of the market.

To fight back and defend its turf, Microsoft was now going head to head with Google across the board in online advertising. As part of this effort, it was investing billions of dollars to improve its own online search software. Separately, it had in May made its biggest purchase ever—paying $6 billion for aQuantive, which distributed advertising across the Internet. Now that it owned this distribution engine, it badly needed additional inventory to sell through it.
Microsoft CEO Steve Ballmer was fed up with losing deals to Google. He had recently lost both of the industry’s two biggest partnership opportunities after coming exquisitely close to agreement. Each time, Google swooped in at the last minute and stole the deal away. Ballmer had flown to New York in December 2005 to negotiate a major ad partnership with Time Warner’s AOL. He left town thinking he had a deal. Google unleashed its ad team headed by Tim Armstrong and came in with a better offer in days and sealed a contract with a $1 billion investment in AOL that valued it at $20 billion.

…

They noticed he kept pushing for very specific concessions on things like the size and shape of display ads—the kind of thing usually left to underlings to iron out. It seemed to them he might be seeking specific promises from Google in order to strong-arm Microsoft to concede the same points. For all the talk, the Google team knew that Microsoft’s prior relationship with Facebook gave it a big advantage. The chances of pulling Facebook away remained small.
Microsoft had been carefully cultivating Zuckerberg. CEO Steve Ballmer had flown to Palo Alto to visit his young counterpart twice. Ray Ozzie, Microsoft’s Chief Software Architect, had also repeatedly visited Palo Alto. As Zuckerberg is wont to do, he took them on long walks. He told Ballmer that Facebook was raising money at a $15 billion valuation.
But Ballmer had come with something very specific in mind. “Why don’t we just buy you for $15 billion?” he replied, according to a very knowledgeable source.

…

The Wall Street Journal called Facebook “the newest Internet darling” and said the deal was “reminiscent of the Internet bubble that ended in 2000.” The Los Angeles Times called the $15 billion figure “staggering.” “It tips the scales in terms of totally ridiculous valuations,” wrote the influential TechDirt blog. This was by far the highest valuation ever given to a private technology company, and one with no profits to boot! Either Microsoft’s Steve Ballmer was insane, or Facebook mattered more than anyone had realized. But if the f8 platform event five months earlier had firmly put Facebook once and for all onto the technology industry map, this investment did the same thing for Facebook on Wall Street. Microsoft’s stock jumped markedly. The ad deal that precipitated the investment was barely noticed in the hubbub over the valuation.
Facebook’s timing on the deal could not have been better.

The dramatically reduced cost of public address, and the dramatically increased size of the population wired together, means that we can now turn massive aggregations of small contributions into things of lasting value. This fact, key to our current era, has been a persistent surprise. At every turn, skeptical observers have attacked the idea that pooling our cognitive surplus could work to create anything worthwhile, or suggested that if it does work, it is a kind of cheating, because sharing at a scale that competes with older institutions is somehow wrong. Steve Ballmer of Microsoft denounced the shared production of software as communism. Robert McHenry, a former editor in chief of Encyclopedia Britannica, likened Wikipedia to a public rest room. Andrew Keen, author of The Cult of the Amateur, compared bloggers to monkeys. These complaints, self-interested though they were, echoed more broadly held beliefs. Shared, unmanaged effort might be fine for picnics and bowling leagues, but serious work is done for money, by people who work in proper organizations, with managers directing their work.

…

storyCode=401139&sectioncode=26 (accessed January 9, 2010).
151 an essay called “The Zagat Effect”: Steven Shaw’s “The Zagat Effect” appeared in Commentary Magazine (November 2000): 47-50.
154 Chris Anderson, author of Free: Chris Anderson, Free: The Future of a Radical Price (New York: Hyperion, 2009): 194-95.
156 The largest studies on PLS or PMA: “Charting the Course of PLS and PMA,” The PatientsLikeMe Blog, August 11, 2009, http://blog.patientslikeme.com/2009/08/11/charting-the-course-of-pls-and-pma (accessed January 9, 2010).
157 he got his neurologist to alter his 10mg dose of baclofen: Thomas Goetz tells the baclofen story in “Practicing Patients,” about the rising involvement of patients in all aspects of their diagnosis and care. The New York Times Magazine, March 23, 2008, http://www.nytimes.com/2008/03/23/magazine/23patients-t.html (accessed January 9, 2010).
158 it also has an “openness philosophy”: “The Value of Openness,” The PatientsLikeMe Blog, December 13, 2007, http://blog.patientslikeme.com/2007/12/13/the-value-of-openness (accessed January 9, 2010).
CHAPTER 6: Personal, Communal, Public, Civic
161 Steve Ballmer of Microsoft denounced the shared production of software: Lea Graham, “MS Ballmer: Linux Is Communism,” The Register, July 31, 2000, http://www.theregister.co.uk/2000/07/31/ms_ballmer_linux_is_communism/ (accessed January 10, 2010).
162 Robert McHenry, “The Faith-Based Encyclopedia,” Technology Commerce Society Daily, November 15, 2004, http://www.tcsdaily.com/article.aspx?id=111504A (accessed January 10, 2010).
162 compared bloggors to monkeys: Andrew Keen, The Cult of the Amatuer: How Blogs, MySpace, YouTube, and the Rest of Today’s User-Generated Media Are Destroying Our Economy, Our Culture, and Our Values (New York: Broadway Business, 2007): 2.
163 a slim volume called Experiences in Groups: W.

While these partnerships are necessary, the exact makeup of the Producer-Performer pair may change depending on the skills needed to take advantage of an opportunity. As Mark Cuban attests, the complement he needed for MicroSolutions was Martin Woodall, but the Broadcast.com dream team included Todd Wagner. Bill Gates started out with Paul Allen, but he also had a long-term Producer-Performer partnership with Steve Ballmer, during which Microsoft created most of its value. Jobs and Wozniak created the iconic computer maker, but Jobs and Jony Ive, Apple’s chief designer, were the team behind the beauty and sensibility of the iMac, the iPod, the iPhone, and the iPad. John Paul DeJoria and Paul Mitchell founded John Paul Mitchell Systems, but years later DeJoria started another venture with his friend Martin Crowley, a talented architect who went bankrupt trying to make a business designing buildings.8 DeJoria pointed him in a different direction and set him up as an architecture buyer supplying materials from Mexico for high-end renovations.

…

At the time, the Carnival Cruise Lines was a three-ship company, but Arison had a vision of turning cruising into a mainstream vacation option. He purchased smaller companies and invested in more boats. The Carnival parent today owns nearly a dozen cruise lines, including Cunard, Holland America Line, and Princess Cruises. Arison is also the owner of the Miami Heat basketball team.
Steven Ballmer
b. 1956, United States
Microsoft
In 1980, two years after graduating from Harvard, Steve Ballmer was invited by fellow student Bill Gates to join a fledgling Microsoft as its manager of operations. Within a year, Microsoft signed its breakthrough deal with IBM to design an operating system for the company’s new product, the personal computer. Ballmer became the marketing and sales guru, and was key to realizing Gates’s vision. As second in command, he accumulated significant equity in the company that made him a billionaire.

He also hung out in the computer room with Gates and shared those long evenings at ISI and C-Cubed. Allen went on to found Microsoft with Bill Gates. When was Paul Allen born?
Paul Allen: January 21, 1953 The third-richest man at Microsoft is the one who has been running the company on a day-to-day basis since 2000, one of the most respected executives in the software world, Steve Ballmer. Ballmer's birth date?
Steve Ballmer: March 24,1956 Let's not forget a man every bit as famous as Gates: Steve Jobs, the cofounder of Apple Computer. Unlike Gates,
Jobs wasn't from a rich family and he didn't go to Michigan, like Joy. But it doesn't take much investigation of his upbringing to realize that he had his Hamburg too. He grew up in Mountain View, California, just south of San Francisco, which is the absolute epicenter of Silicon Valley.

Moreover, Apple warned that attempts to unlock the phone from the AT&T network would “cause irreparable damage to the iPhone’s software, which will likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed.” Apple threatened to turn your $499 iPhone into a $499 iBrick! And it did!
Asked to react to the announcement of the iPhone, Microsoft CEO Steve Ballmer literally laughed out loud, “Five hundred dollars fully subsidized with a plan! I said that’s the most expensive phone in the world, and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine. . . . We have great Windows Mobile devices on the market today. . . . I look at that [the iPhone] and I say I like our strategy. I like it a lot.”

…

CNET.com, July 12, 2002, http://news.cnet.com/2100-1040-943519.xhtml.
210 iPod, boasting 100 million customers: Steven Levy, “Why We Went Nuts About the iPhone,” Newsweek, July 16, 2007.
210 Apple’s stock shot up 44 percent: Matt Krantz, “iPhone Powers up Apple’s Shares,” USA Today, June 28, 2007.
211 “four times the number of PCs that ship every year”: Morris, “Steve Jobs Speaks Out.”
211 Ericsson released the R380: Dave Conabree, “Ericsson Introduces the New R380e,” Mobile Magazine, September 25, 2001.
211 Palm followed up with its version: Sascha Segan, “Kyocera Launches First Smartphone in Years,” PC Magazine, March 23, 2010, http://www.pcmag.com/article2/0,2817,2361664,00.asp#fbid=C81SVwKJIvh.
211 “one more entrant into an already very busy space”: “RIM Co-CEO Doesn’t See Threat from Apple’s iPhone,” InformationWeek, February 12, 2007.
212 the phone was exclusively available from only one carrier: In a handful of markets regulators ruled the exclusivity arrangement illegal.
212 “The bigger problem is the AT&T network”: David Pogue, “The iPhone Matches Most of Its Hype,” New York Times, June 27, 2007.
212 priced at a mere $99 in 2007: Kim Hart, “Rivals Ready for iPhone’s Entrance; Pricey Gadget May Alter Wireless Field,” Washington Post, June 24, 2007.
212 “cause irreparable damage to the iPhone’s software”: Apple, press release, September 24, 2007.
213 “I say I like our strategy”: Steve Ballmer interviewed on CNBC, January 17, 2007.
213 They ran out of the older model six weeks before the July 2008 launch: Tom Krazit, “The iPhone, One Year Later,” CNET.com, June 26, 2008, http://news.cnet.com/8301-13579_3-9977572-37.xhtml.
213 60 percent went to buyers who already owned at least one iPod: Apple COO Tim Cook’s comments at Goldman Sachs Technology and Internet Conference, cited in JPMorgan analyst report, “Strolling Through the Apple Orchard: The Good, the Bad and the Ugly Scenarios,” March 4, 2008.
215 the average iPhone user paid AT&T $2,000: Jenna Wortham, “Customers Angered as iPhones Overload AT&T,” New York Times, September 2, 2009.
215 as high as $18 per user per month: Tom Krazit, “Piper Jaffray: AT&T Paying Apple $18 per iPhone, Per Month,” CNET.com, October 24, 2007, http://news.cnet.com/8301-13579_3-9803657-37.xhtml.
216 Apple announced its 10 billionth app download: Apple.com, “iTunes Store Tops 10 Billion Songs Sold,” February 25, 2010, http://www.apple.com/pr/library/2010/02/25iTunes-Store-Tops-10-Billion-Songs-Sold.xhtml.

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Are You Smart Enough to Work at Google?: Trick Questions, Zen-Like Riddles, Insanely Difficult Puzzles, and Other Devious Interviewing Techniques You ... Know to Get a Job Anywhere in the New Economy
by
William Poundstone

If you’ll excuse me, Dr. Feynman, I’d like to consult with our human resources department.” The interviewer left the room for ten minutes. When he returned, he announced, “I’m happy to say that we’re recommending you for immediate hiring into our marketing department.”
This joke pokes fun at one of the most famous brainteaser questions, long associated with Microsoft and alleged to have been devised by Steve Ballmer himself. It expresses deep ambivalence about this style of interviewing. Feynman (a childhood hero of Sergey Brin’s) shows more creative thinking than does Microsoft’s so-called right answer.
A true story: Brin did graduate work in Stanford’s computer science building, named for its donor, William Gates. Each room in the Gates Building had a four-digit number. “We were offended at having four-digit numbers when you don’t have ten thousand rooms,” Brin explained.

…

“provocative or inappropriate photographs”: CareerBuilder, “Forty-Five Percent of Employers Use Social Networking Sites.”
“I always try to get a list of people”: Agrawal interview, June 8, 2010.
“It gets harder and harder”: Carlisle interview, April 7, 2010.
“Not hiring someone for poor communication skills”: Posted by “libation” on the New York Times site, as comment to Wortham, “More Employers Use Social Networks.”
Chapter Five
alleged to have been devised by Steve Ballmer: Poundstone, How Would You Move Mount Fuji?, 79–80.
Feynman (a childhood hero of Sergey Brin’s): Auletta, Googled, 28.
“We were offended at having four-digit numbers”: Auletta, Googled, 32.
“A very senior Microsoft developer”: See www.joelonsoftware.com/items/2005/10/17.html.
Tyma posed this question to his mother: See Tyma’s blog post at http://paultyma.blogspot.com/2007/03/howto-pass-silicon-valley-software.html.

In a world that is nice and prizes conformity, routine work and standardisation of opinion, the contrast to normal behaviour by those who are unreasonable, is very apparent. In some examples this signals enormous amounts of grit, and there seems to be a correlation between the disagreeableness of some legendary entrepreneurs and their success. Steve Jobs was famous for his prickliness, Bill Gates threw tantrums, Microsoft’s Steve Ballmer threw chairs, Andy Grove of Intel was so fierce that a subordinate fainted during a performance review, and Jeff Bezos is known for going into rages that his Amazon colleagues call “nutters”.
According to a biography, Bezos’ notable put-downs include: “I’m sorry, did I forget to take my stupid pills today?”; “If I hear that idea again I’m gonna have to kill myself”; and the straightforward “Why are you wasting my life?”

“Paul saw that the technology17 was there,” Gates later recalled. “He kept saying, ‘It’s gonna be too late. We’ll miss it.’” They teamed up to write a version of BASIC (short for Beginner’s All-purpose Symbolic Instruction Code), a compact computer language for the MITS machine, and Microsoft was born.
When Microsoft had about thirty-five employees, Gates and Allen decided they needed a professional manager. They turned to Steve Ballmer, who had lived down the hall from Gates at Harvard. Unlike Gates, Ballmer, the son of Swiss immigrants, hung around Cambridge long enough to get his Harvard degree in math and economics. Brainy Ballmer then headed to Stanford for a master’s, but quit to take the Microsoft job as head of marketing, user education, and systems testing.
* * *
The Forbes 400 melting pot
The 97 immigrants who have appeared on the Forbes list over the last 25 years came from 34 different countries.

…

Few companies want to engage in a lengthy court battle with the government, but Ellison did and prevailed. He then sued PeopleSoft to eliminate the takeover defense it had put in place to deter Oracle. As Matthew Symonds, a writer at the Economist and author of another Ellison biography put it, “He stalked PeopleSoft a long time until it was weak enough to fall into his hands.”
The same winner-take-all philosophy drove Bill Gates and Steve Ballmer, his longtime number two at Microsoft and fellow 400 member. Ballmer had a reputation for being even more competitive than his boss. Once they had defeated such 1980s competitors21 as Apple, Novell, and Digital Equipment Corporation (DEC), they turned their collective attention to the Internet. That meant capturing control of what was then a new technology, the Internet browser used to access the Web.

…

More than a century after New York newspaper publisher Horace Greeley advised young fortune hunters in a now-famous editorial to “Go West, Young Man,” his maxim has taken on a fresh resonance with the transformation of the West Coast into a new kind of frontier. Now, instead of prospecting for gold or wildcatting for oil, the would-be billionaires moving out West are making their lucre in industries based on ideas. The West Coast not only has Bill Gates and several other Forbes 400 fortunes generated by Microsoft, including Steve Ballmer (2006 net worth: $13.6 billion), Paul Allen (2006 net worth: $16 billion), and Charles Simonyi (2006 net worth: $1 billion); it also has dozens more billionaires than does the East Coast.
* * *
New York’s down, California’s up
In 1982 New York was at the top of the heap, with more 400 members than any other state. California placed third, behind second-place Texas. But starting in 1991 California took the lead, and it widened until recently, when New York, flush with hedge fund and private equity riches, mounted a small comeback.

“It’s a company without revenue but asking for a billion dollars,” he said to Lee. “Those two kids are crazy!” After it became clear that Google was not just an innovator but a financial powerhouse with resources to take on Microsoft, the rivalry took on a bloodlust. Just how intensely Microsoft’s CEO, Steve Ballmer, despised his competitor to the south became clear in depositions that would be filed in the Lee lawsuit. The year before, in November 2004, a top Microsoft executive named Mark Lucovsky had gone to Steve Ballmer with the unwelcome news that he was leaving Microsoft. “Just tell me it’s not Google,” said Ballmer, according to Lucovsky’s sworn testimony. Lucovsky confirmed that it was indeed Google. Lucovsky testified that Ballmer went ballistic: “Fucking Eric Schmidt is a fucking pussy! I’m going to fucking bury that guy!

…

“We use a fair amount of energy,” says Bill Weihl, a computer science PhD who came to Google in 2005 to become its conservation czar. “Some people say ‘massive amounts.’ I try to avoid ‘massive.’ But it’s a lot.”
He would not put a number on it. “The fact that we’re not transparent about it causes us embarrassment,” he says, explaining that “competitive reasons” justify the reticence. By not knowing what Google is spending, Microsoft CEO Steve Ballmer, for instance, will have no target to aim at when apportioning his own cost estimates for infrastructure. “If I’m Ballmer, I’m probably going to pick a number that’s too high, in which case it bankrupts Microsoft—and that’s good for Google,” says Weihl. “Or he’ll pick a number that’s too low, in which case it can’t really compete. And that’s good for Google.”
One of the most power-intensive components of the operation is the huge chillers that refrigerate water to keep the temperature in the building no higher than around 80 degrees F.

…

After many years of relatively poor efforts, Microsoft was now committed to spending hundreds of millions of dollars to build a competitive engine. To head the team, it hired the scientist Qi Lu, a forty-eight-year-old whose tireless work habits were legendary. Those regarding this as a coup included Google’s search czar, Udi Manber: “I have the highest regard for him,” he said. Microsoft called its new search engine Bing, and it was launched in June 2009 by CEO Steve Ballmer with great fanfare.
In terms of search quality, Bing did not intimidate Google. Its relevance algorithms were basically no different from those in the previous version of Microsoft’s search, much less likely to draw out the Audrey Fino–like needles in the Internet haystack. Eventually that could change, as Microsoft would supply Bing to Yahoo for the latter company’s search engine. That would provide Microsoft with a critical mass of users to run the thousands of constant experiments necessary to improve search quality.

It was light on battery use and e-mails were dispatched so efficiently that an average month of messages consumed less network spectrum than one local telephone call.5
It was one thing to buck an industry fad. The bigger danger was that some global mammoth would simply smash the small Waterloo upstart. The rival Balsillie and Lazaridis worried about most was Microsoft after it signaled an interest in wireless e-mail by joining a short-lived venture with semiconductor maker Qualcomm in the late 1990s. At the same time Microsoft executives, including CEO Steve Ballmer, began asking RIM staff questions at trade shows about how BlackBerry worked. Microsoft’s combative generals would not be thrown off by the playful ruses that kept Yankowski at bay. Nor was Balsillie inclined to mess with them. “I had an expression: Never moon the gorilla,” Balsillie says. “Microsoft was the gorilla. We cut them by far the widest berth of anyone.”
Balsillie’s strategy for dealing with Microsoft was to undersell RIM’s potential.

…

While the board negotiated a contract with Heins, Balsillie and Lazaridis went about their jobs, telling no one, not even their closest colleagues, of the coming changes. They made their last pilgrimage to Las Vegas in early January for the Consumer Electronics Show, the industry’s annual showcase for the latest mass market technology breakthroughs. They met in private with Lenovo’s executive team, led by chairman and CEO Yang Yuanqing, to explore licensing RIM’s phone software to the Chinese handset maker. They sat down with Microsoft’s Steve Ballmer, a longtime BlackBerry admirer. Side by side they glided through the convention, stopping to stare in wonder at Samsung’s arena-sized marketing display for its high-end, Android-powered Galaxy Note smartphone. BlackBerry, Balsillie mused, was still late with its 4G phone and had only a fraction of the marketing muscle needed to compete with the sprawling Korean manufacturer. Glad I’m almost out of here, Balsillie told himself.

The arrival of computer companies transformed the event, and within a few years it would become the largest digital technology exposition of them all, drawing audiences upwards of 150,000 and all but paralyzing Sin City for a week each January. Apple didn’t attend CES. Steve preferred to announce his products in an environment he controlled.
Microsoft didn’t control CES, but it certainly overshadowed everyone else. Chairman Gates, who relinquished his CEO title to Steve Ballmer in 2000, gave the keynote speech eight years running. Gates was a natural choice as the show’s semipermanent celebrity speaker, and he used the dais as a bully pulpit. In 2000, Microsoft really was the computer industry. Some 90 percent of the world’s personal computers ran its Windows operating system. Its software managed not only desktop and laptop PCs but also the servers that stored and organized the data of the world’s biggest corporations, and that undergirded the information technology of most governmental bureaucracies.

…

He wanted Microsoft software on billions of devices; Steve just wanted anything that would help him sell a few thousand more Macs each month. Gates was the only one who could reasonably think about dominating his awkwardly named but clearly inevitable “consumer-electronics-plus” era. He was powerful, and very, very smart: despite his penchant for dense verbiage, he had done a wonderful job describing the future of computing as we now have it, some fifteen years later. All he and Steve Ballmer had to do was execute the strategy. If they could, they would steer the company through its transition to this future, and in so doing return Microsoft to the kind of growth that investors wanted to see.
No one knew it at the time, but Gates’s speech that January morning in Las Vegas marked the apex of Microsoft’s hegemony. On December 31, 1999, the company had been worth $619.3 billion, with a share price of $58.38.

Design of Business: Why Design Thinking Is the Next Competitive Advantage
by
Roger L. Martin

Despite its central importance to P&G, very little of the brand-building heuristic had actually been committed to paper. In part, that is because P&G itself isn’t a marketplace brand the way Tide, Pampers, and Crest are. Those individual brands are managed by the global category teams that have grown up around them. Those teams have become a magnet for marketers who want to hone their brandbuilding expertise to the highest possible pitch. Among the alumni of P&G’s brand-building academy are Steve Ballmer of Microsoft; Meg Whitman, formerly of eBay; Jeff Immelt of GE; James Hackett of Steelcase; and Scott Cook of Intuit. But because little had been done to shift brand building significantly toward an algorithm, a great deal of knowledge about building brands existed only in the oral history of the company and in the heads of its current brand-building experts. The only way to understand what brand building actually entailed at P&G was to hang around the experts, watching and trying to learn from what they did and said.

For example, when I
heard that Microsoft (ﬁnally) announced that it wanted to enter
the SaaS business with a CRM product, I ﬁred off an e-mail to
select journalists: ‘‘Well, it’s 7:29 A.M. in Singapore, and I just
read that Microsoft announced a new offering to compete with
us while I was asleep.’’ I included the interofﬁce memo that I had
written (I’d done this before; tactics dictate strategy), and the San
Francisco Chronicle ran an article about my response on its Web
site. They included what I said in the e-mail and even reiterated
their ‘‘favorite line’’ of the memo: ‘‘Steve Ballmer has publicly
fretted that he would not be ‘out-hustled by anyone,’ but the
fact is that Microsoft is being out-hustled by everyone.’’ Even
better, they ran the entire memo in another section. No doubt,
sending carefully chosen members of the press well-crafted ofﬁce
memos is one more way to get your story told.
A large part of our marketing and PR strategy is making
sure that we always remain relevant.

As important as their early success with the
Apple II was, however, their greatest impact came seven years
later, when they took the inspiration of people like Engelbart
and Kay, and created a mass-market personal computer that
set a new standard for participation.
Before we get to that, we need to return to 1976, and move
from Silicon Valley to New Mexico, where Gates and his partners, including former Harvard friends Paul Allen and Steve
Ballmer, were writing programs for the Altair computer. That
was the year that Gates wrote a famous letter to the hobbyist community complaining about rampant software theft. He
claimed that nothing would please him more than establishing a business model for the community that would allow him
to hire ten programmers to write software full time for the
hobbyist market.
Just four years later, Microsoft was proﬁtably writing closedsource code for a variety of platforms, and Gates was
approached by IBM, then the biggest computer company in the
world, to supply a stable operating system for Big Blue’s new
line of personal computers.

WHAT HAPPENS AT SUCCESSION?
This brings us to the question of succession. Since most organizations are run by Ones and have a team of Twos (sometimes Functional Ones) reporting to them, replacing the CEO can be extremely tricky. Do you promote someone from the executive staff even though they are likely a Two? Microsoft did this in 2000 when they replaced Bill Gates, a prototypical One, with Steve Ballmer, literally his number two. Or do you reach deep into the organization and pull a One from a level lower where they are likely to exist? General Electric famously did this with Jack Welch in 1981. It was an incredibly bold move by GE—not only did they promote an executive two levels down in the organizational chart past all of his superiors, but in doing so they named the youngest CEO in the history of GE.

This is totally unmatched in the economic history of the world.” And, he told us, the Israeli entrepreneur continues to perform in unimaginable ways.12
While the Holy Land has for centuries attracted pilgrims, lately it has been flooded by seekers of a different sort. Google’s CEO and chairman, Eric Schmidt, told us that the United States is the number one place in the world for entrepreneurs, but “after the U.S., Israel is the best.” Microsoft’s Steve Ballmer has called Microsoft “an Israeli company as much as an American company” because of the size and centrality of its Israeli teams.13 Warren Buffett, the apostle of risk aversion, broke his decades-long record of not buying any foreign company with the purchase of an Israeli company—for $4.5 billion—just as Israel began to fight the 2006 Lebanon war.
It is impossible for major technology companies to ignore Israel, and most haven’t; almost half of the world’s top technology companies have bought start-ups or opened research and development centers in Israel.

Many companies run their entire businesses using remote servers, without having to invest in computers, storage, or associated software. To serve this need, Amazon, which has vast amounts of excess storage, has a service called EC2, for Elastic Compute Cloud. Likewise, Microsoft has Azure, a cloud-based operating system that will let companies develop and run Web applications without setting up their own data center. Microsoft CEO Steve Ballmer has predicted that nearly all Internet data centers will be outsourced in this way by 2020.
Cloud computing will lead to a single, integrated e-memory experience. Every device will act as an access point to recall from your e-memory. And every device will also become a source of information feeding into your e-memory, helping to record your experience.
Most people’s cloud-interface device of choice is going to be a small, lightweight device that combines the functions of a cell phone, a camera, a personal digital assistant, a Web browser, an MP3 player, a GPS locator, and any other sensors and functions that can be crammed into it.

He stole the show. The conference-goers, among the best-known financiers, entrepreneurs, and CEOs in Europe—preeminent risk-takers, all—listened at first in bemusement. Not your usual conference speaker. Then they got sucked into his strange story. Some said he made more sense than their CFOs. Afterwards, in our audiencefeedback survey, they rated him as best speaker of the day—tied only by Steve Ballmer, the Microsoft CEO.
As a scientist, Mandelbrot’s fame rests on his founding of fractal geometry, and on his showing how it applies in many fields. A fractal, a term he coined from the Latin for “broken,” is a geometric shape that can be broken into smaller parts, each a small-scale echo of the whole. The branches of a tree, the florets of a cauliflower, the bifurcations of a river—all are examples of natural fractals.

That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten, or eleven-figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two-week vacation in January during which they will likely be glued to their BlackBerries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Ballmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the BlackBerry away and enjoy life. So this is it. With all due respect, I am dropping out. …... I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years.

He is not shy in claiming that Apple is the only company taking big risks and accomplishing some magic in the personal computer world. He thinks he knows why. "I think back to Detroit in the seventies, when cars were so bad," he says. "Why? The people running the companies then didn't love cars. One of the things wrong with the PC industry today is that most of the people running the companies don't love PCs. Does Steve Ballmer [Microsoft] love PCs? Does Craig Barrett [Intel] love PCs? Does Michael Dell love PCs? If [Michael Dell] wasn't selling PCs he'd be selling something else. These people don't love what they create." Jobs paused for effect. "And people here do."
For the record, none of those three guys has anything but good feelings about PCs. But only Apple's products look as though they were conceived out of love.

During all this time, Jobs has reportedly received neither a salary nor a cash bonus—his entire compensation has been in Apple stock.20
It’s a compelling story, and the list of Apple’s successes is long enough that it’s hard to believe it’s all due to chance. Nevertheless, because Apple’s history can only be run once, we can’t be sure that we aren’t simply succumbing to the Halo Effect. For example, as, I discussed in Chapter 7, the iPod strategy had a number of elements that could easily have led it to fail, as did the iPhone. Microsoft CEO Steve Ballmer looks silly now for scoffing at the idea that consumers would pay $500 for a phone that locked consumers into a two-year contract with AT&T and didn’t have a keyboard, but it was actually quite a reasonable objection. Both products now seem like strokes of genius, but only because they succeeded. Had they instead bombed, we would not be talking about Jobs’s brilliant strategy and leadership that simply didn’t work.

Although Microsoft stated in its internal memos that it would not lead a campaign of fear, uncertainty, and doubt against open-source products, it feverishly implemented the well-worn corporate tactic of disinformation, using everything in the company’s powerful marketing arsenal to discredit the reliability of Linux. Launching a direct attack against the bulwark of F/OSS, the GPL, Microsoft representatives described this legal agreement with three of the most feared words in the United States: cancer, communism, and un-American. In 2001 during a media interview, Microsoft’s CEO, Steve Ballmer, stated unabashedly, “Linux is a cancer that attaches itself in an intellectual property sense to everything it touches” (quoted in Greene 2001). Even amid various advertising campaigns, none of these words ever stuck.
Microsoft’s early assaults against Linux only fueled an existing anti-Microsoft sentiment among developers. Yet not everyone in the trenches of the free software community was enthused by the newfound commercial popularity of open-source software.

He didn’t meddle in software if he trusted
the people who were working on it, but you couldn’t bullshit him for a
minute because he was a programmer. A real, actual, programmer.
Watching nonprogrammers trying to run software companies is like
watching someone who doesn’t know how to surf trying to surf.
“It’s OK! I have great advisors standing on the shore telling me what
to do!” they say, and then fall off the board, again and again. The standard cry of the MBA who believes that management is a generic
function. Is Steve Ballmer going to be another John Sculley, who nearly
drove Apple into extinction because the board of directors thought that
selling Pepsi was good preparation for running a computer company?
The cult of the MBA likes to believe that you can run organizations that
do things that you don’t understand.
Over the years, Microsoft got big, Bill got overextended, and some
shady ethical decisions made it necessary to devote way too much management attention to fighting the US government.

By itself, an operating system is not that useful. People buy operating systems because of the useful applications that run on it. And therefore the most useful operating system is the one that has the most useful applications.
The logical conclusion of this is that if you're trying to sell operating systems, the most important thing to do is make software developers want to develop software for your operating system. That's why Steve Ballmer was jumping around the stage shouting "Developers, developers, developers, developers."1 It's so important for Microsoft that the only reason they don't outright give away development tools for Windows is because they don't want to inadvertently cut off the oxygen to competitive development tools vendors (well, those that are left), because having a variety of development tools available for their platform makes it that much more attractive to developers.

But financial numbers alone don’t tell us anything about the “aura” of Apple, about why people so identify with its products that Jobs’s death seemed almost to be a national day of mourning, as numerous memorials appeared outside Apple stores the morning after his death was announced.
As Walter Isaacson’s biography reveals, Jobs was not a nice guy or an easy person to get along with, especially if you were close to him. Yet he wanted to instill a level of aesthetic perfection in Apple products so that they would remain distinctive and never fall into the rut of “mechanical reproduction” or pure salesmanship (which is where he saw Microsoft going under Steve Ballmer’s leadership). He saw himself as a designer of things that people didn’t even know they wanted until he created them.
But there’s more to Apple products than their beauty. Their common aesthetic suggests that they are connected to one another, a “family” of products. The iTunes app acts as both a commercial and a community hub, allowing music and other entertainment to be purchased with ease, and linking all the products to the ever-evolving “cloud” that represents designers’ dreams of connectivity.

“We were obviously very, very proud. We’d worked really hard. It was—there was an enormous number of people that put in personal sacrifice and it was paying off in spades. It was a beautiful day.”
• • •
The iPod had been regarded by a lot of pundits as Apple getting lucky, a fluke, a one-shot. When Apple entered the cutthroat cell phone market, it was predicted the iPhone would flop. Microsoft’s Steve Ballmer famously said it would never get any market share. But the iPhone was a hit from the start, and Apple used its old playbook of rapidly adding features and models.
Apple released the iPhone in mid-2007. By the end of the year, 3.7 million iPhones had been sold. By the first quarter of 2008, the sales volume of iPhones exceeded sales of Apple’s entire Mac line. And by the end of 2008, the company was selling three times as many iPhones per quarter as it was selling Macs.

It was a lot easier for Robert to quit and find another job easily because he already had an online reputation by this point at his blog, http://scobleizer.com (now powered by—you guessed it—WordPress). “NEC hired me for the sales department, mostly because of my blog. When I went into the interview, they had a stack of my blog posts printed out right there.”
From his job at NEC, Robert got invited to a “Most Valuable Professional” meeting at Microsoft of the top corporate customers. At that meeting, someone confronted CEO Steve Ballmer publicly, saying, “You need to create a better image for Microsoft.”
Ballmer responded, “OK, I’ll give a dollar to anyone in this room who comes up with a good idea right here.”
Robert stood up and said, “Put a more public face on the company.” He explained how, outlining what amounted to a strategy for corporate blogging—long before the concept of “corporate blogging” existed.
Ballmer said, “That’s a great idea,” pulled out a dollar from his wallet, signed it, and gave it to Robert.

There, by the pool at Kutcher’s house, with his wife, Demi Moore, sitting close by, Kutcher had pitched them on ownership of the company. Sean “Puffy” Combs, the rapper, had also tried to negotiate an ownership deal with Ev.
Each time, Ev had politely responded, telling the rich and famous, who were never told no, “No.” It happened with CEOs too. At a dinner at Bill Gates’s multimillion-dollar house in Seattle, Steve Ballmer, the chief of Microsoft, told Ev if he ever wanted to sell the company, Microsoft would be very interested. Ev politely declined Ballmer.
For Ev it was never about the money or the celebrities. It always went back to Ev’s vision of building something that gave people from nowhere—like, say, Clarks, Nebraska—the same equal voice as those from somewhere.
Now it was Al Gore’s turn to try to get some of the blue bird’s feathers.

In the past five years, from 2010 through 2014, Zynga racked up annual losses totaling more than $800 million; Groupon lost nearly $1 billion; and Twitter reported annual net losses that added up to more than $1.5 billion, according to the 10-K forms they filed with the Securities and Exchange Commission.
Old-guard tech CEOs seem baffled by the phenomenon of companies that operate for years in the red. “They make no money! In my world you’re not a real business until you make some money,” Steve Ballmer, the former CEO of Microsoft, said about Amazon in 2014, a year when the company lost $241 million yet saw its market value climb to $160 billion. Oracle CEO Mark Hurd, another old-guard business guy, expressed similar astonishment about Salesforce.com. “There’s no cash flow,” he said about that company in April 2015. “What are they worth right now? $35 billion?… It’s crazy, just crazy.” That was nothing.

I hope you will see that the ability to harness the power of rare metals to make smartphones, for example, is as impressive as the phones themselves. It’s not hyperbole to state that the fate of the planet and our ability to live a sustainable future in which technology can freely flow to the billions who do not yet have access depends on our understanding and production of rare metals and our avoidance of conflict over them.
I
Metals, Metals Everywhere
Microsoft CEO Steve Ballmer was incredulous. “There’s no chance that the iPhone is going to get any significant market share. No chance,” Ballmer prophesied during a CEO Forum before Steve Jobs released the iPhone in June 2007. But, by the end of the first week of sales, most storeroom shelves were bare; Apple and its AT&T partner sold hundreds of thousands of phones. The company was fast on its way to taking more than 20 percent of the smartphone market within just a few months.1
To those who waited in line outside Apple stores for a day or two to snap up the first phones—or paid others hundreds of dollars to wait for them—the iPhone was a revolution, the stuff of dreams.

pages: 403words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by
Kate Raworth

‘With this technology – if we can master it – we can create these parts, repair the equipment faster, and perhaps help to save a life.’42
These open-source innovations are impressive but still fledgling, and to many the movement may look unfeasibly utopian. So remember the 21-year-old Finnish computer student, Linus Torvalds, who in 1991 was writing the kernel of an open-source operating system – just for a hobby, he said – which quickly morphed into Linux, now the most widely used computer operating system in the world. At the time, Microsoft’s CEO Steve Ballmer called Linux ‘a cancer’, but today even Microsoft has embraced the movement by using Linux in its own products.43 ‘The story of open-source software is a little portal to the future for us,’ Muirhead told me, and he is optimistic. ‘Once you put something in the commons, you can’t take it away,’ he explained, ‘so every single day the knowledge commons grows and becomes more useful. Once people get the idea – and see its circular economy potential – they really want to create solutions for it.’44
That same spirit of building the knowledge commons inspired Janine Benyus to launch the website Asknature.org, which makes the long-held secrets of nature’s materials, structures and processes open-source for all – such as how a gecko clings without glue, how butterflies make pigment-free colours, and how mussels glue themselves to watery rocks.

pages: 443words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay
by
Guy Standing

The mortgage deduction alone costs $70 billion a year, with three-quarters going to homeowners with annual incomes of over $100,000.10 Four times as much goes to the wealthiest fifth in mortgage interest deductions as on social housing for the poorest fifth.
Some tax breaks that do not amount to much in total are worth a great deal to the few who gain from them. The USA gives tax breaks to wealthy owners of racehorses and professional sports teams – halving the $2 billion price that Steve Ballmer, billionaire co-founder of Microsoft, paid for the LA Clippers basketball team. UK tax breaks include £3 billion a year in reduced capital gains tax for individuals selling their businesses. According to Richard Murphy of Tax Research UK, in the tax year 2013/14, £1.8 billion of this benefited just 3,000 people, who each sold their company stakes for more than £1 million.
Landed estate owners in Britain have enjoyed a special tax break introduced in 1994 by John Major’s government, which exempted ‘sporting estates’ from business rates (local property taxes).

pages: 386words: 91,913

The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age
by
David S. Abraham

I hope you will see that the ability to harness the power of rare metals to make smartphones, for example, is as impressive as the phones themselves. It’s not hyperbole to state that the fate of the planet and our ability to live a sustainable future in which technology can freely flow to the billions who do not yet have access depends on our understanding and production of rare metals and our avoidance of conflict over them.
I
Metals, Metals Everywhere
Microsoft CEO Steve Ballmer was incredulous. “There’s no chance that the iPhone is going to get any significant market share. No chance,” Ballmer prophesied during a CEO Forum before Steve Jobs released the iPhone in June 2007. But, by the end of the first week of sales, most storeroom shelves were bare; Apple and its AT&T partner sold hundreds of thousands of phones. The company was fast on its way to taking more than 20 percent of the smartphone market within just a few months.1
To those who waited in line outside Apple stores for a day or two to snap up the first phones—or paid others hundreds of dollars to wait for them—the iPhone was a revolution, the stuff of dreams.

But what we have given them is a model to say here is how you can think about this stuff, and you can make your own judgment call based on your company profile and your regulatory environment, and so on, which bucket you will put things in. And it is leadership like that that we think is a role we can play in terms of helping develop useful models and frameworks for the industry.
Yourdon: I’ve got a bunch of questions that I can’t avoid asking because I’m sure everyone will want to know—and that is the question of whether Bill Gates or Steve Ballmer hired you or promoted you into your position, or whether you have any other tidbits, you know, about them that you want to talk about.
Scott: Well, I actually worked for Kevin Turner, who was our Chief Operating Officer at Microsoft, but Steve was a part of the interview process, and I’d actually worked with Bill on a number of different things even before coming to Microsoft—so it’s probably the only job where I’ve gone into the job knowing the senior executives and the company reasonably well before coming to take the job.

I just thought, “Okay, if I come here and get really smart, open-minded computer scientists, mathematicians, and physicists and put them together with smart anthropologists, smart sociologists, smart economists, then maybe something interesting will happen.” So I pitched the idea, showing why I thought Microsoft needed expertise in these areas. I talked about where technology was moving and where Microsoft would want to be moving. I presented the argument about the kinds of people who were located in Cambridge who wouldn't relocate. Surprisingly, it took just a few weeks actually for Bill Gates and Steve Ballmer to say “yes” to the idea. It all happened very quickly.
Ghaffari: Was the idea to set up the New England Research Center largely your initiative or Christian's, would you say?
Chayes: I think this one was more my initiative. Christian was very happy. He was doing well, and we had a great team at the Theory Group. We had wonderful friends and a wonderful house. He said, “What's the matter with you?”

One manifestation of the breadth of what can be patented is the famous patent issued in 2002 for swinging sideways while on a swing. That patent was issued to a five-year-old child. See U.S. Patent No. 6,368,227 (issued Apr. 9, 2002).
70. See Posting of Adrian Kingsley-Hughes to Gear for Geeks, Ballmer: Linux “Infringes our intellectual property” http://blogs.zdnet.com/hardware/?p=154 (Nov. 17, 2006, 06:55), discussing Steve Ballmer’s assertion that Linux infringes Microsoft’s patents at the Professional Association for SQL Server conference in Seattle on November 16, 2006); Roger Parloff, Microsoft Takes on the Free World, FORTUNE, May 14, 2007, http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100033867/index.htm?source=yahoo_quote; Posting of Cory Doctorow to BoingBoing, Ballmer: Linux Users Are Patent-Crooks http://www.boingboing.net/2006/11/17/ballmer_linux_users_.html (Nov. 17, 2006, 07:44).

And when these pirates eventually get into a situation where they need to buy the software legitimately, they will already be hooked on my software, not my competitors’. Piracy is just another way of boosting market share.
Microsoft had exactly this in mind when they made a big push to get their products translated into Chinese and distributed across that country. They knew they would be pirated; they knew that they would make less than one sale for every ten copies used. Microsoft’s Steve Ballmer has been quoted as saying: “If you’re going to get pirated, you want them to pirate your stuff, not your competitors’ stuff. In developing countries, it is important to have a high share of the piracy software.” When China enters the free world, they will already be Microsoft compatible. Until then, Microsoft isn’t losing anything. It’s a perceptive business strategy.
ERASING DIGITAL INFORMATION
There are lots of times when we want to completely erase digital information.

Microsoft’s thirty or so employees occupied half of the eighth floor of the Old National Bank building in Bellevue, just across Lake Washington from the city of Seattle.
Carrying a portfolio of his work, Simonyi entered Suite 819 relaxed and confident, thanks to his mistaken impression that Metcalfe had already called to smooth the way. In fact, he was an unexpected visitor. Bill Gates being tied up at the moment with a delegation from a Japanese manufacturing company, Simonyi was escorted instead into the office of Steve Ballmer, a friend of Gates’s from Harvard. Unlike Gates, Ballmer had stayed at Harvard to graduate, after which he signed on to be Microsoft’s maniacal chief salesman and hyper-motivational troop leader.
“I projected supreme confidence and everything,” Simonyi recalled. “I had a great portfolio and so Ballmer was incredibly impressed.” This was an understatement. After a few minutes Ballmer bounced out of his chair, exclaiming, “Bill has to see this!”

Steve Jobs was known for the clarity of his insights about what customers wanted, but he was also known for his volatility with coworkers. Apple’s founder reportedly fired employees in the elevator and screamed at underperforming executives. Perhaps there is something endemic in the fast-paced technology business that causes this behavior, because such intensity is not exactly rare among its CEOs. Bill Gates used to throw epic tantrums. Steve Ballmer, his successor at Microsoft, had a propensity for throwing chairs. Andy Grove, the longtime CEO of Intel, was known to be so harsh and intimidating that a subordinate once fainted during a performance review.
Jeff Bezos fit comfortably into this mold. His manic drive and boldness trumped other conventional leadership ideals, such as building consensus and promoting civility. While he was charming and capable of great humor in public, in private, Bezos could bite an employee’s head right off.

Trower wrote a sixty-page report calling on Microsoft to create a group that built software tools to develop robots. Microsoft gave Trower a small group of researchers and he went off to build a simulator and a graphical programming language. They named it the Microsoft Robotics Developer Studio.
Then, however, Gates retired to start his foundation, and everything changed at Microsoft. The new chief executive, Steve Ballmer, had a very different focus. He was more concerned about making money and less willing to take risks. Through Microsoft veteran and chief strategy officer Craig Mundie, he sent Trower a clear message: tell me how Microsoft is going to make money on this.
Ballmer was very clear: he wanted a business that generated one billion dollars in revenue annually within seven years. Microsoft had industrial robotics partners, but these partners had no interest in buying software from Microsoft—they already had their own software.

In fact, management frequently fails to suffer at all, as corporate boards often reset option prices to reflect the newly diminished stock price. In sharp contrast to management’s loss of a mere opportunity, when share prices decrease, shareholders lose cold, hard cash. Options-based compensation schemes represent a no-lose game for management of publicly traded companies.
Microsoft provides a textbook example of using option grants to insulate employees from share price declines. In April 2000, chief executive Steve Ballmer faced a problem of low morale among employees concerned about the consequences of the Justice Department’s antitrust activity and a four-month, 44 percent stock price decline. To boost spirits, Ballmer awarded more than 34,000 Microsoft employees stock options priced at the then current stock price. The chief executive wrote in an email to employees that “we know stock options are an important part of our compensation.”

In a meeting with the W3C, the international consortium that helps devise standards for the Web, a vice president of the Direct Marketing Association reportedly “proposed that Do Not Track signals should actually permit data collection for advertising purposes, the very thing the mechanisms were designed to control.” The Association of National Advertisers then published an open letter to Microsoft CEO Steve Ballmer, criticizing his company for automatically enabling Do Not Track on its Internet Explorer 10 browser (which at the time hadn’t even yet been released). Even the most cursory privacy measures, it seemed, would be vigorously contested.
But the effort was doomed from the beginning. The Privacy Bill of Rights called for corporations to sign up voluntarily, with enforcement entrusted to the congenitally toothless FTC.

Mr Lane, for instance, not only believes in the mom test
but also has a “sister theory” to explain market inertia. This is mainly
because he has a sister who spent a long career as an executive with an
American airline, where she “fought every technological change over 30
years, even though she couldn’t say why”.
Mom, however, is invoked most – if not necessarily heeded. According to an industry legend, Steve Ballmer, now the boss of Microsoft, conducted a mom test before the launch of Windows 95, using his own
mother as the guinea pig. When she had finished trying it out, Ms
Ballmer asked, “How do I turn it off?” Her son, somewhat irked, pointed
to the start button. “You go to the start button to stop?” asked his mother,
quite perplexed. But today, several versions of Windows later, that is
still how it is done.

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Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase
by
Duff McDonald

A larger-than-life personality, Lee was also known for backroom politicking and front-room confrontations, but Dimon knew a valuable asset when he saw one. The Rupert Murdochs, Sumner Redstones, and Sam Zells of the world asked for Lee by name when working with J.P. Morgan. He also hosts an annual confab in Deer Valley that draws an enviable roster of heavyweights, including DreamWorks’ Jeffrey Katzenberg, General Electric’s Jeffrey Immelt, Microsoft’s Steve Ballmer, and the NBA commissioner, David Stern.
(Shortly after the deal, Dimon asked Lee to join him for dinner at the Post House, a steak house in the Lowell hotel on East 63rd Street. Moments after sitting down, Lee pulled a piece of paper out of his pocket and put it down on the table next to him. Dimon looked at Lee and said, “What’s that?” Lee replied, “It’s the list of things I needed to do today.

The media covered the buzz exhaustively. But despite all the spectacle, after a strong opening weekend—when Apple says it moved 270,000 units in thirty hours or so—sales were actually relatively slow. For now, the app selection was locked, the phone ran only on painfully slow 2G networks, and nothing was customizable, not even the wallpaper. And it was lambasted for being too expensive. Microsoft CEO Steve Ballmer famously scoffed, “Five hundred dollars? Fully subsidized? With a plan?… That is the most expensive phone in the world.”
The hit features were probably Safari and Maps—two media-rich, multitouch-powered experiences that set the stage for everything the iPhone was capable of. That, and the touchscreen itself. That small team that had Explored New Rich Interactions starting five years before had indeed nailed their vision of how people were hoping to interact with devices.

How Steve Jobs Nearly Blew It
Early in 2007, Apple introduced the iPhone, a product that deserves the label “iconic.” Its groundbreaking design and novel features, including multitouch screen, powerful mobile Internet browser, accelerometer, and GPS made it an instant hit, with rapturous reviews and sales of over 6 million handsets in its first year. The iPhone had plenty of doubters prior to its release. These included Microsoft cofounder Steve Ballmer, who said, “$500? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard. Which makes it not a very good email machine.” Two thousand seven and later years proved the skeptics very wrong.
But Jobs himself spent the first year of the iPhone’s existence on the wrong side of a critically important debate.

We talked to a headhunting firm, and the guy was candid with me and said,
“Look, we can’t recruit a COO for you because anybody who is capable of doing
that job for a company at your level would demand to be the CEO.” And I
thought, “That’s kind of crazy. How could they be the CEO? They don’t know
the business or the customers. How could we just plunk them down?” In retrospect, that was pretty good thinking; look at Microsoft: it took them 20 years to
hand off from Bill Gates to Steve Ballmer. He needed 20 years of training to
take that job. Jack Welch was at GE for 20 years before he became CEO.
Sometimes it does work, but I think for these fragile little companies, just putting a generic manager at the top is oftentimes disastrous.
There was no way we could have hired first-rank businesspeople in that
environment. There were too many companies that were low-risk and had
more assets that were hiring the best people.

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What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by
George R. Tyler

As Princeton economist Alan Blinder explains, the mere threat of offshoring creates an environment that depresses wages.11 It has proven to be an effective tool to coerce concessions from employees or to fend off unionization, with extortion commonly practiced even by the largest and most illustrious US firms. For example, some 40 percent of Microsoft’s employees already work abroad, yet chief executive Steve Ballmer has threatened to export even more jobs if Democratic politicians close foreign tax havens. “We’re better off taking lots of people and moving them out” of the United States, citizen of the world Ballmer asserted.12
Any obligation of industry leaders to nurture the American economy and its workers by even the most profitable and bluest of blue-chip US multinationals has been vitiated by Reaganomics.

The naked mole rat was a superior beast, not only insensitive to pain but parthenogenic: The queen of the colony fertilizes and gives birth without assistance from the males. Munger and Myhrvold held an animated conversation about the sex life of mole rats while the others sat listening in numb disbelief.6
The next morning, Gates took Buffett and Munger over to Microsoft so that his number two, Steve Ballmer, and half a dozen engineers could interview them, almost as anthropologists, so strange did it seem to them that these two incredibly brilliant men were such latecomers to the world of computers. They were like a couple of cavemen savants discovered in the bush who had seen an airplane but wouldn’t take a ride. Despite his sense of the Internet’s importance, for example, it had not yet occurred to Buffett to tell GEICO to hurry up and exploit the Internet to sell insurance.